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Zomato Ltd
Earnings Call Analysis
Q3-2024 Analysis
Zomato Ltd
The company continues to expand its presence, adding new stores in micro markets where existing stores are nearing their capacity. This strategy is aimed at improving service levels without cannibalizing revenues, indicating a well-calculated approach to growth that focuses on strengthening its market fit and serving customer demand effectively.
Newly opened stores are breaking even on contributions within just two months. The progression from breakeven to achieving a target margin of 5% depends on a variety of factors. The company has communicated caution in projecting this margin timeline due to the nascent state of the quick commerce business and varying supply chain costs by locality.
Capital expenditures for new initiatives are currently not significant in the context of the company's overall size. The management believes the investment payback will be attractive, evidencing prudent capital allocation practices. Additionally, subsidy levels have remained relatively unchanged, with quick commerce seeing virtually negligible subsidies.
The company's top 8 cities contribute around 60% of its revenue, with no major change from previous reports. The focus remains on expanding within larger cities before venturing into newer markets. Quick commerce, particularly Blinkit, has been a significant driver for the company's confidence in achieving growth beyond the previously forecasted 40%.
The working capital situation is efficient, with the company operating on a negative working capital basis due to its marketplace model. This involves receiving payments up front and paying sellers later, contributing to a healthy cash flow despite rapid growth.
Investments are being strategically directed towards acquiring restaurants, creating supply for events, and expanding the team. The focus is less on monetization and more on building out a widespread network as the company prepares for growth in its dining out ventures. While revenues are expected to grow, costs, particularly in terms of employment, are anticipated to increase faster in the short term as part of this investment.
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Ladies and gentlemen, a very good evening, and welcome to Zomato Limited's Q3 FY '24 Earnings Conference Call. From Zomato's management team, we have with us today, Mr. Akshant Goyal, Chief Financial Officer; Albinder Singh Dhindsa, Founder and CEO of Blinkit; and Kunal Swarup, Head of Corporate Development.
Before we begin, a few quick announcements for the attendees. Anything said on this call, which reflects outlook for the future or which could be construed as a forward-looking statements may involve risks and uncertainties. Such statements or comments are not guarantees of future performance, and actual results may differ from those statements.
Additionally, please note that this earnings call is scheduled for a duration of 45 minutes, and we will be starting directly with the Q&A section of the call. [Operator Instructions].
The first question is from the line of Mr. Sachin Salgaonkar from Bank of America.
Congrats once again on a strong set of numbers. I have a few questions. First question, I wanted a bit of clarification on the top line growth of 50%. Is this for FY '25 or for the next few quarters? And how should we look at the mix between the different businesses in terms of growth? Should it be very similar to what we saw in this quarter where 29% to 30% growth could come from food and 100%-plus from other businesses?
Sachin, this is Akshant this side. So I mean, we don't want to give guidance on individual businesses at a quarterly level because there are multiple factors there. There's seasonality, there's competition and so on. I think what we meant when we said that we think that business -- I mean our base case guidance continues to remain that our adjusted revenue should grow at 40% year-on-year for the foreseeable future.
And it's possible that at least over the next few quarters, that remains north of 50%, that is what we wanted to say. But individually, for each businesses, it might change. So we are nowhere saying that the profile of the growth for all businesses will remain consistent to what we have seen in the last quarter.
Very clear on this one. Second question, I wanted a bit more clarity on the take rate. So if we calculate take rates on adjusted revenue, clearly, they are down and presume this is on the back of IAS 115. So question out here is any color you could provide on the Q-o-Q change of take rate vis-a-vis the commentary on how much is driven, let's say, by platform fee, restaurants take rate and advertisements?
So directionally, overall, as we mentioned in question -- in response to question 6 also that platform fee has gone up. Our income from advertisements has gone up and the commission revenue has also slightly gone up, right? So I think if you, therefore, looked at a gross level, I think the take rate is slightly flattish to slightly higher than the last quarter. But as a result of the adjustments that we have laid out in question 7 of our letter, we see a slight decline on a net basis.
Okay. And any thoughts, it's mainly platform fee versus compared to other factors?
Sorry, Sachin, not clear on the question here.
Sorry, Akshant, what I meant the change in take rate is predominantly driven by the platform fee, right?
No, not just that. I think our ad income has also grown meaningfully.
Okay. Got it. My third question is on MTU growth. This quarter, we saw 8% Y-o-Y versus, let's say, your food growth is close to 29%. Is this a trend we could look going ahead or there are certain drivers, which could accelerate the growth further for food MTUs?
So Sachin, this is Kunal here. Look, I think like we've articulated in the past, we do expect MTC growth to be a big driver of growth in the future and that is going to be a function of increasing annual ordering frequency of the annual transaction based on our platform because a large part of that annual transaction base currently transacts only, let's say, 3, 4, 5 times a year and as more of that starts transacting more frequently, it will result in the MTC growing, right? So I think our expectation is that MTC will be a large part of the driver of growth. And of course, we will also continue to add new customers as we go along.
And my last question is on Blinkit. Clearly, a fantastic performance out there. The product market fit also is getting clearer and clearer. Any color on what's driving the AOV or the product mix? And any thoughts should AOV stabilize at these levels or continue to increase?
Sachin, this is Albinder. So even in the previous calls, we've laid out that this is still a very fast-evolving business, also shown in sort of the increase in top line and the use cases that we serve are also increasing fairly fast. So there is no guidance that we can give on sort of where the AOV heads. It's depending on a lot of factors, seasonality, festivals, which categories we are adding and growing.
So we can't really provide any guidance. I think AOV is more of an outcome of the kind of assortment and selection we provide to the customers. And -- so it will continue to evolve as the business evolves.
I completely understand there is a seasonal fluctuation. And clearly, you guys are in nascent stages in terms of growth. But if you look at the mix for last 3, 4 quarters, any color in terms of what are some of the products what consumers are frequently buying?
So I think -- I don't think it's driven by only frequency. I think a lot of it is what we do as well. So if we increase our category share and add new categories like we've done in beauty and a few others, they will lead to a movement in the average order value, right? So those are, I think, bigger factors than looking at customer behavior and trying to predict whether some frequency of particular product type is driving the average order value.
Next question is from the line of Mr. Vivek Maheshwari from Jefferies.
A few questions. First, Akshant, one of the comments in the letter you have mentioned that growth in food delivery is due to the fact that platform is still underserved from a supply-side perspective. So do you think -- I mean, between the demand side factor and supply side, you have pointed out to supply side. So do you think supply is a bigger thing, which will drive demand in your view?
I think so that point was more to draw out the difference in growth rates between our food delivery business and some of the other companies in the restaurant industry space, right? But at an absolute level, I think I would perhaps say that demand is a bigger factor going forward than the supply at an overall long-term level.
Understood. Okay. That makes sense. The other thing is on the quick commerce side, the sequential growth. And again, the letter mentions about multiple festivals as well as occasions. I would imagine World Cup would also be probably sitting over there. What is -- so do you think from a sequential perspective, the base is higher and therefore, the fourth quarter should be somewhat a bit more moderate or sober than what we have seen in the third quarter because of these factors?
Yes, I think that's a fair assumption to make.
Got it. Okay. And on the quick commerce side, again, on the dark store. So if -- again, I know it's a bit of an apple to mango comparison, but if you look at it from a Domino's outlet perspective, so the moment in the micro market, they add another store, the first store throughput comes down by 30%, 40%.
Do you think as you start -- and you have called out the top 8 cities the growth rates, et cetera, et cetera. But when you add a store in the micro market, will that cannibalization impact have some -- have an impact on your revenues as well as efficiency?
Vivek, let me address that. So typically, when we are adding a store in an existing micro market, the revenue doesn't clearly see an impact because we end up adding a store when we are fairly confident that we have a very strong product market fit in that type of local neighborhood. And the second thing is we start doing it when the existing store is starting to reach a baseline, 50%, 60% of its utilization so that we know that at some point of time, we would need to add more supply in the area. So to that extent, we don't see that as cannibalization but more as improvement of service levels for all customers in the micro market.
Got it. And one more follow-up on the quick commerce business. So you have mentioned 20% of stores operating at 5% contri margins. The endeavor in the medium term as you are going to ramp up stores, the older -- so let's say, the 5% contribution margin after which, let's say, which month or let's say, a quarter, do you think that the stores hit this, let's say, magical mark of 5%?
I think like very hard to say that. I think with the data that you have provided in the letter this time is with respect to how long are we taking to hit breakeven, contribution breakeven, which has now come down to 2 months for the stores that we opened in the month of October last year, right? But from getting to breakeven to getting to 5%, I think there are multiple factors. That number will not be -- I mean, it's also a function of the overall supply chain cost in that city, neighborhood. And I think the business is very young for us to be able to confidently give you a view on the time that it will take to get to a 5% kind of margin.
Okay. Got it. And last question, Akshant, this Hyperpure comment that you have in the letter, the value-added food supplies where you're setting up a plant for sauces, spreads, et cetera. What is this CapEx that you are thinking about? Why not go for a third-party model at this stage? Can you just elaborate on what does this entail?
It's not very meaningful, Vivek, in the context of the overall size of the business. And at this point, we believe the payback on this CapEx is going to be very attractive. And hence, we want to at least try with one facility on our own and then we'll take a call from there, if it makes sense to expand. But at this point, it's not a very meaningful CapEx that we are looking at.
Possible to quantify, Akshant, on the CapEx number?
We're not sharing that data.
Okay. And is that in a way a precursor to your own labels in quick commerce?
No, there is no plan of doing that at this point?
Okay. So this will stay and target only the B2B side of things, which is essentially the restaurants?
That's right. Yes.
Next question is from the line of Ankur Rudra from JPMorgan.
First of all, can you give me a sense in terms of the platform-level discounts across both food delivery and quick commerce? Has that meaningfully change in the last few quarters?
So I mean, like are you referring to -- I mean, subsidies to customers can be in multiple ways, right? So...
Yes, not Gold. So outside of Gold, headline platform discounts on the food, promotions on food, not so Gold, excluding Gold offers. It is specific to the subscriptions, outside of subscription?
No, so outside of subscription, it hasn't changed meaningfully in the last quarter on the food delivery side. On quick commerce, anyways subsidies are negligible, right? So we -- they're very, very limited, although I mean even on food, the number is small, but in case of quick commerce, it's close to 0. So yes, there's no change there as well.
Okay. And moving to the food delivery side, could you give me a sense how concentrated the businesses in the top 8 to 10 cities now? Like you highlighted in Blinkit top 10 is about 90%, where are we on food now? And are you seeing as you grow you need to diversify the base or all the top cities are also growing at the same pace?
Ankur, this is Kunal here. Not a very -- no meaningful change from the numbers that we've disclosed in the past. The top 8 continues to be around the 60% mark, give or take percentage here and there. So at this point, even our top cities are growing at roughly the same pace.
Maybe on Blinkit, you highlighted the category mix has expanded. You've highlighted electronics, home decor, seasonal and beauty. Is there a way for us to get how meaningful these sections are especially seasonal demand, which might vary from quarter-to-quarter as a proportion of the overall the GOV or SKUs?
No, Ankur, we're not providing that breakup.
Okay. Then on the Blinkit, staying with that, you've so far highlighted that you will be going deeper in the existing cities. All the new store additions are where you already have presence. Given that the profitability is expanding at a very rapid rate, 70% are profitable. At what timeline do you think you'll start going wider and deeper in the cities where you're under indexed right now?
I think that is part of the existing exercise only. So I think we -- at least in the top 8 cities, we still have a lot of ground to cover. And we're under-indexed in almost every city at this point, even in the largest city. So I think like the journey from where we are today to maybe the next 1,000 stores is going to be just like or maybe even more is going to be within the top 8 cities largely speaking.
No, I understand top. I meant beyond the top 3 or 4 maybe.
We're already doing that.
Already doing for the next few years, we want to have a better understanding. But I think the job right now is to sort of keep our focus on expanding our footprint in the larger cities first.
Okay. Just last question on working capital. I noticed has been -- you've been enjoying an inflow in the last couple of quarters despite very strong growth. Is there something happening over here? Or is it -- are you like negative working capital per store basis now?
So on working capital, the broader business itself is a negative working capital business, right? Because we are a marketplace here. We receive revenue upfront and pay out our sellers with a slight lag. The only receivable amount is on the advertising receivables that we have. So yes, that does counterbalance the negative piece. But on balance, there's no meaningful working capital in the Blinkit business.
Next question is from the line of Gaurav Rateria from Morgan Stanley.
Congrats on great execution. The first question is with respect to your comment of growth in 50% mark, versus your last shareholder letter talking about medium-term growth of 40%. So what really drove the change in expectations? Is it that Blinkit is surprising and doing better than your expectations? Or you have seen a better uptake in food delivery growth rate here?
No, so I think food delivery, as we mentioned, was, I think, slightly below our expectations last quarter, but I think this confidence on growth being more than 40% is largely on back of what we are seeing in the quick commerce business.
Got it. Secondly, on quick commerce, is it possible to share some split of what percentage of our stores are franchisee stores versus a non-franchise? And has that got to do anything in unit economics for us?
So I'll answer the second question first, Gaurav. There is no difference between -- there's a negligible difference between unit economics, whether it's a franchisee-operated store or it's own store. The mix, we are not disclosing that for the last few quarters. That's -- we figured out it's more competitively sensitive information. But what we will continue to do is our -- our plan is to add more and more trustworthy franchisees to the operation, and that's our strategy going forward.
Got it. And also I saw that you added new cities this time, 2 new cities. So what's the broad level thought process? I thought it's -- plan is to go deeper into the existing cities, a lot of ground to cover there. But are you kind of identifying new set of satellite cities that you think you would be targeting over the next 1 to 2 years? And the overall addressable market is not just limited to 15 cities, but more like 30, 40 cities?
Yes. So Gaurav, we have to build out a lot of the supply chain capabilities with a more long-term view of the business, right? So when we do that, we want to know whether we will be in 100 cities or 500 cities over the next, let's say, 2 to 5 years. So that's why we keep experimenting and we mentioned the letter also that we strategically test out a few markets to see if there is acceptance of quick commerce in those markets. And we will eventually get to opening more lookalikes for them.
But then our network planning and our supply chain planning and infrastructure build-out will take that into account that we will be going to those markets in the future as well. So that's why we opened an experiment with some of the new markets.
Got it. Last question from me. In light of the comment that you made that you're sticking with your breakeven plan for quick commerce, which means that your capital consumption there will dramatically come down. And the question 15 answer that you mentioned the no plan to buy back or give dividend. So what's next that we are planning from use of capital perspective? It will be helpful to get some context around that.
Yes, Gaurav, so at this point, there's nothing new on the radar. So we'll just stick to focusing on what we have on the table and let the cash compound on the balance sheet for now, and then we'll take a call down the line on what to do with the cash. And at this point, there's nothing new that we're planning.
Next question is from the line of Rahul Jain from Dolat Capital.
Just one question on this. You said you're having a better ad monetization or ad revenue per order basically. So is it just a reverse math kind of a number? Or is there a way to review trial based on a per order basis? And what are the genesis of looking at this from this metric perspective?
Rahul, your question was not very clear and your voice is a little muffled. Could you just repeat what you said?
Yes. Is it any better?
Yes, much better. Thank you.
Yes. Sorry for that. So what I was essentially trying to understand, Kunal, is that your ad revenue, we mentioned that we have better ad monetization now, which is ad revenue per order. Is this just a reverse calculation mathematics or you're trying to pivot it in such a way that on a per order basis, there has to be certain ad revenue?
No. This is not the latter. I mean, like it's a way of representation on -- and way of measuring how much we are monetizing through ad sales. But the idea is we don't think of it that way, that every order has to give us some ex-rupees of ad, right? So it's -- to answer your question, I think it's the former. It's a derived metric and representation more than anything else.
Right, right. And Akshant, we see that the expenses in the dining out business continues to expand. Is it that we account discount offer to our consumer as a cost or these are also netted off and these costs are just to enroll more restaurant?
Yes. I think so the idea in this business is -- I mean, it requires investment, both -- I mean there are 2 pieces of going out here, dining out business and also the events and ticketing business. So we are in a build-out phase here.
So idea is to -- and both acquiring restaurants and creating supply of events and onboarding getting partners, I think all of that requires investment. We're also building team here. So there is also going to be an element of increase in employee cost over the next few months and quarters. So therefore, I think while the top line, which is how we're measuring -- which is measured by GOV here, we expect that to continue to grow. But both monetization in terms of revenue growth and eventually profitability growth, I think, will take some time and grow with the lag. That's the plan for now.
Yes. But just to understand, if I am getting a 30% discount on the app, while the restaurant may be giving you in very rare example as 25%, so there is no such thing. If there's a 30% discount, the consumer is saying, then probably you are getting 40%. Is that the way it works?
Yes. I mean the discount is entirely borne by the restaurant here. We are not bearing any discounts...
So it's just a commission business that will be all.
Yes. And what I meant by monetization will lag here is like the amount of commission we charge is not the focus area right now. The idea is to first create a large enough network here of restaurants. And similarly on the event side, a large enough supply of events. And to that extent, we'll focus less on monetization for now, and hence, eventually therefore, we might see the cost growing maybe faster than the revenue here and like idea is to keep it around breakeven and then continue investing in the business.
But these costs are all people and getting the business cost, it's not any element of discount or anything in that.
That's right.
Next question is from the line of Mr. Sudheer Guntupalli from Kotak AMC.
Yes. Congratulations on a great quarter. Just a couple of questions from my side. First is an extension of what Gaurav asked earlier on the confidence of the 50%-plus growth number. We understand that quick commerce is driving this. But just at a macro level, the consumption trends don't seem to be that encouraging our buoyant. So are you implying that quick commerce may not be as tightly coupled with broader macro? And accordingly, this 50% number need not be construed as very aggressive?
Not really. I think for us, Sudheer, I mean, quick commerce is just a very small fraction of the overall retail consumption. And I think most of the growth that we are seeing in quick commerce is also on account of increasing coverage, opening more stores, right, and reaching out to more consumers in the area serviced by the stores today, right?
So in some ways, therefore, I don't think the growth of quick commerce is in any way implying the underlying consumer demand, right? Also, we should note that both -- I mean food is like more discretionary demand as compared to people buying on Blinkit, which we believe is like more nondiscretionary. And therefore, there's also that element of different consumer behavior and demand patterns that we are seeing in the market over the last year or so. So that also plays a role. But I would say that given the low penetration of e-commerce today, that is the main driver of the high growth that we are seeing at this point.
Okay. Okay, Akshant. Second question is on the food delivery revenue growth on a reported basis of around 10% sequentially. So looks like the restaurant commission rates have improved almost 70 basis points here. So incrementally, what is the headroom for take rate increases just on the restaurant side, not including the delivery fee?
So Sudheer, this is Kunal here. I'm not sure how you've been able to compute that. But yes, I think incrementally, the headroom for take rate increases will be on account of multiple factors, not just restaurant commissions, but on account of advertising monetization, which is also -- which comes from restaurants, but it is a discretionary spend. It will also be a function of platform fee and therefore at this point, we're not saying that it will be only driven by 1 of the 3 factors, it could be a combination of deep.
Next question is from the line of Swapnil Potdukhe from JM Financial.
Good set of numbers, so congratulations. So first question is on food delivery. And I just wanted to get some more sense on the supply side comment that you have made in the shareholder later. So what kind of restaurants are actually getting in -- coming in on the platform? You mentioned that there was a 20% Y-o-Y growth. Are these more of cloud kitchens? And if that is the case, what would be the share of cloud kitchens to your revenue or GOV? And that's part A.
And part B is like how much more room is there for your transaction restaurant base to improve from where we are today? So that -- if you could answer that first.
So I think the restaurants that we're adding on our platform are out of 2 kinds. One is new restaurants, which are opening up in the country. And second bucket is response, which have been around, but have not been on our platform so far, right? So in the first part, I would say a large chunk of what we are seeing as new restaurants today are cloud kitchens, at least on our platform that we are onboarding.
But in the case of existing restaurants, I think it's a fairly equal mix of cloud kitchens and more physical format restaurants, dine-in restaurants, [indiscernible] and so on. So it's a mix of all of that as far as the existing restaurants are concerned.
And I think like -- we think that at this point, we should continue to -- the number of restaurants should continue to grow at the pace that we are seeing so far over the last few quarters. So that it should continue. So I do expect this to continue to grow at 20% or so year-on-year.
Got it. Good. And the second question is with respect to your contribution margins. Now a little bit of working over here. So if you see your take rates on a sequential reported to take rates have improved 70 basis points, whereas your delivery cost or delivery fees collected from the consumers have come down meaningfully. And now that would suggest that your contribution margin expansion has to come either from delivery cost or discounts or other variable costs. And you just mentioned that discounts have not moved significantly.
So is it possible that your delivery costs and other variable costs have come down meaningfully and that is what is helping your contribution margin?
Swapnil, this is Kunal here. Look, I think it's a combination of factors, right? One, margins are also a function of average order value, right? And when average order values increase, that could also impact margins. So therefore, we don't want to get into the specific details of which revenue and cost items actually resulted in improvement in contribution margin. But broadly speaking, platform fee, ad revenue were contributors on the cost side, there was -- there were elements of cost efficiency. But I would say the revenue side was a little bit more stronger in terms of contribution margin increase.
Got it, Kunal. And there has been a slight bit of increase in the fixed cost of food delivery Q-on-Q, if you see. I remember last year, you had mentioned there was some IT-related costs and which -- is that the same reason this quarter also or there is also some costs related to marketing and maybe employee cost?
Largely 2 reasons, Swapnil. One is, yes, you're right, some part of it is due to marketing, and that was on account of the World Cup and some of the festive marketing that we did, which was seasonal and we don't expect that to be elevated going forward. But the second element was improvement in -- or rather increase in some of our server and tech infrastructure costs that we expect will continue to stay.
Got it. And one question on Blinkit as well. So if you see your take rates in Blinkit, if I were to look it from over the last 3, 4 quarters, there has not been a significant improvement in your Blinkit take rates. And whereas you have very clearly mentioned that your ad income seems to be improving. The other 2 factors over there would be your product mix margins and your handling fees or delivery fees, right? So will it be fair to say that while your ad income continues to improve, the other 2 levers have not improved or there has been a slight decline in that as you're focusing more on expansion?
Yes, that would be a fair assumption. At this point, ad monetization has been the bigger driver of that increase.
And Swapnil, because we are so multi-category as a platform, we don't internally look at take rate percentages as much as we look at the actual rupee value that we are able to get in a particular product category. So you might have categories like electronics, where percentage-wise, your take rates will be much lower, but in terms of rupee value, they end up being significant. So all of that mix, it all depends on the product mix and how it works.
Got it. If I can make a suggestion over here, it will be great if you guys can start sharing the product mix on a GMV basis for Blinkit at least. I mean I think that would give better color to most of us tracking the company. Just a suggestion, in case...
Yes, we will not be doing that. We are still in a competitive and evolving category. So we don't intend to do that.
Okay, guys. And just last one, if -- so there was quite a few news flows around use of cash. And you have very clearly mentioned that you don't intend to return the cash as dividends or buybacks in the near future. But can you give some clarity on will there be a possibility of any M&A activity and we have deployment towards that I mean, is that the reason that you don't want to think on returning back to the cash to the shareholders?
See, if that is the reason, and we are not mentioning it in response to question, so it's unlikely I'll say that to you right now, also, right? So your question is irrelevant, right? I think we've -- I mean, we've spoken about it and also as a response to a previous question, that I think at this point, there is no plan.
And I think like it's still competitive. We are the only listed company in our space, right? So we, at this point, having a strong balance sheet is important for us. And I think the focus is just on building the businesses right now. And I think at some point where we feel comfortable, we will look at capital return to shareholders or whatever makes sense at that point.
Next question is from the line of Ashwin Mehta from AMBIT.
Yes. So one question on Blinkit to Albinder. Albinder, what is typically the peak orders per day per dark store that is possible to do? So when you're talking about numbers like 50%, 60% utilization, when it happens, you start to open another dark store in the same location. So just want to get a sense in terms of what this number could be?
Ashwin, this is -- this can really differ depending on the configuration, the size of the facility and the kind of use cases we serve out of that facility. So there is no -- we used to have different -- at different points of time, different benchmarks, and they have evolved over time. If you had asked us 2 years ago, we used to think we could add max 2,500 to 3,000 orders in our stores. We have stores that have done 4,500 orders in a day.
So I think this is going to be an ever-evolving problem statement, defined more by however we able to evolve our tech and processes to be able to process these numbers and also the configuration of the infrastructure that we have. So there is no benchmark on this. And we continue to innovate. And even within our existing ecosystem changed the benchmark that we have for what is the maximum number that we can do from a particular store.
Yes. Fair enough. The second one on the fixed cost side. So if I look at your fixed cost on a per dark store basis, that seems to be where there's a very tight band on the Blinkit side. So why are we not seeing the leverage per dark store basis in fixed cost as the growth has been pretty strong?
So Ashwin, Kunal here, I think the right way to think about it is to compare it on a year-on-year basis with revenue growth, right? So revenue has grown 100% year-on-year, whereas fixed cost base has grown 18% year-on-year, right? And that shows you the operating leverage clearly. The number of stores exactly I don't know what -- how you're computing that, but that may or may not reflect the full operating leverage.
Okay. Okay. Secondly, in terms of food ordering, what proportion of our GOV or MPUs would have been driven by Zomato Gold this quarter?
So I mean we're not talking about that, Ashwin anymore. I think last quarter, we reported about 70%, I think higher than that.
Okay. Okay. And thirdly, in terms of trying to recoup, say, the reduction in customer delivery charges because of Zomato Gold, do you think the platform fee increases should be able to compensate that? Because my calculation seems to suggest you would probably have fallen from, say, INR 27 per order to more like INR 16 over the last 5 quarters?
Yes. So it will not fully recover it. I mean that's not how we look at the business. I think idea is not to make every gold order as profitable as every other order, right? So I think the overall objective of the business is to maximize absolute profits. And that means we have to invest in some areas of the business and make money in some other areas. I think we'll do that. So that's how we're looking at it.
Okay. Okay. And the last one from a Blinkit GOV perspective, any idea on the share of non-grocery that we would have now?
No, Ashwin, we're not providing that split.
Ladies and gentlemen, indeed, in the interest of time, we will now take last 1 to 2 questions. The next question is from the line of Navin Killa from UBS.
I had a couple of questions. In fact, these are related to the previous question. So for the current quarter, particularly for the food delivery business, is there any sense we can get as to the trends in AOV because I think you did mention that there was a little bit of benefit that you got from higher AOVs as well?
And then secondly, as a percentage of your total -- I don't know whether you look at it as total supply or toal GMV, what would be cloud kitchens today for the food delivery business?
So I'll take your first question. Yes, I mean, like I said, AOV increases were largely seasonal. So you would see some sort of reduction maybe on that number, but difficult to predict. And we're not giving any particular guidance, especially around that. As far as cloud kitchen share of GOV's concerned, again, that's not a metric that we report Navin, but directionally speaking, yes, in terms of the new supply that is getting added, a lot of that is on account of cloud kitchen. And overall, over the years, the stock of cloud kitchens has increased in the overall mix that we have on the platform.
Right. And would it be fair -- sorry, third question here. Would it be fair to assume that the commissions that you're able to charge the cloud kitchens would be more than the normal brick-and-mortar restaurants?
We don't share that mix, and I don't think they would be very different. It's now broadly in a certain range, whether it is cloud kitchen or sort of offline restaurants or dine-in restaurants. So I wouldn't say there's a big difference there.
Next question is from the line of Samarth Patel from Equirus.
I have 2 questions. First one on Blinkit, just to expand on the GOV growth point. So given that now we are nearing adjusted EBITDA breakeven in the business, what would be our strategy regarding the expansion of new stores? Will it be focused primarily on GOV growth or on enhancing margin post breakeven? So I just want to get a qualitative idea from 2, 3 years timeline perspective.
Yes. So Samarth, I think I mean we've prioritized growth here for sure. I think it's -- I mean -- and growth is more a function of how much we're able to execute and what opportunity we see in terms of number of new store addition, right? So whatever that leads to in terms of margin is where we land. But if we see opportunity for good quality growth, then I think we'll not shy away from. And then if you have the bandwidth and resources to expand, then we'll do that. And that's the sort of mindset we are working with here.
Understood. Clear. Second question on the food delivery side, like we reported 3% adjusted EBITDA margin for the food delivery and near-term guidance is around 4% to 5%. Given that there will always be inherent economies of scale in this business, we can sort of keep on expanding the margin. So would we be focusing on margin expansion or we will plow back the margins again after we achieve our near-term guidance and move the trend line of growth to, let's say, 25% GOV growth? So what would be the strategy there in terms of GOV growth and margin expansion?
See, if we have levers to be able to influence growth to that extent, then we'll definitely do that, right? But I think the point is that it's also dictated by market competition, et cetera, right? So I think at this point, we're doing all we can. Again, like my previous response, I would say that idea is on good quality growth. And if that comes at cost of some margin compression, then it's okay with us, right theoretically speaking, but that hasn't happened so far, and we've been able to deliver margin expansion along with growth. At some point in the future, that might change as margins mature. But for now, we think that trajectory will continue.
Thank you. Ladies and gentlemen, we will now conclude this conference call. Thank you for joining us, and you may now disconnect your lines.